A few things about the 27 buildings used to posit this benchmark:
First, they’re all in midtown. Aside from 7 World Trade—the gorgeous 52-story tower built by Larry Silverstein, with top rents of around $80 a foot—no building outside of midtown can even approach matching that area’s top office rents.
Also, these buildings are owned by familiar names in New York real estate—Brookfield, Durst, Solow, Macklowe and Steve Roth’s Vornado.
Three of these 27 buildings have traded in the last four years for at least $1 billion—200 Park Avenue, 767 Fifth Avenue and 666 Fifth Avenue. (Observer publisher Jared Kushner is a principal in Kushner Companies, which bought 666 Fifth.)
One-third of the buildings are on that stretch of Park Avenue in the plaza district.
And, like One Bryant Park, most of the 27 draw tenants from Manhattan’s main economic engines—the financial-services industry and the attendant ones that serve or work with it, like corporate law and advertising.
Finally, all of the buildings, whatever their quality, are subject to the same market forces that dictate the vacancies and the rents of other Manhattan office buildings.
The office-vacancy rate continues to dwindle—it’s down to around 6 percent, the lowest since 2001—and the rate can only drop so far before it bottoms out and starts to inch back up. A faltering local economy that casts more New Yorkers into unemployment or a jarring socioeconomic calamity could spawn just such an upturn in vacancy rates, emptying office space and leaving it lingering for lease.
But so could consistently higher rents. At some breaking point in the not-too-distant future, tenants will opt out of signing leases for $125 or more a foot, because they can’t afford them or because they can go elsewhere. Then the new benchmark will recede into history, waiting for another boom market to make it seem as quaint as $100 a foot does now.